UK Bank News - 2008                               

FSA considers naming banks that receive most customer complaints - Banks could be named and shamed under proposals outlined yesterday by the Financial Services Authority (FSA). The FSA is required by law to keep some information private but said it was also allowed to publish more details in other areas. The proposals also includes naming more companies that the FSA has investigated as well as highlighting those that have done well.

Banks have also been accused of denying millions of savers the chance to benefit from a rapid cash transfer service that was launched yesterday. Electronic payments can be dealt with within hours, rather than four days, but consumer groups have said that the banks are denying the process because they can make up to £30 million a year by sitting on the cash. Eddy Weatherill, of IBAS, said: "By dragging their feet the banks can continue to profit. The launch is nothing but a publicity exercise." - Times 28/05/2008

Banks are 'profiteering' on overdrafts - Banks and building societies have increased their overdraft rates this year, even though the Bank of England has cut the base rate, it has been disclosed. The average overdraft rate on a current account is now 12.95 per cent, compared with 12.55 per cent in January, according to the personal finance website Moneyfacts. This is despite the Bank of England cutting the base rate on two occasions this year. Campaigners claim the higher charges are evidence the banks are trying to boost their revenues ahead of a ruling on "unfair" overdraft charges. Eddy Weatheril, of IBAS, said: "Banks are looking for every opportunity to increase their profit margin. It is always profit above customers. And we call that profiteering." - Telegraph 20/05/2008 Read full article

Repossession: why none of us is safe - You can't make your mortgage payments, so the bank takes your home. William Little talks to those who've suffered the trauma and outlines the homeowner's rights. Read Full article which includes  IBAS Mortgage Shortfall cases and comments regarding repossession and mortgage shortfall problems - Telegraph 03/05/2008

UK Bank Penalty Charges - Consumers Accounts - High Court Ruling

Skipton cashes in on financial crisis with £800 mortgage fee - Mortgage costs rose further yesterday as a building society became the first major lender to charge borrowers to take out a standard variable rate home loan. Skipton said customers will now have to pay £800 for its 6.7 per cent deal. Experts said the trend started by Skipton was likely to spread. There were accusations that lenders were "profiteering" from the credit crisis.

The move by Skipton, the sixth biggest building society, came amid further evidence yesterday of the growing pressures on families. Halifax, the biggest mortgage lender, announced that it will charge borrowers without a 25 per cent deposit an extra 0.1 per cent. Stroud & Swindon lifted its rates by half a percentage point. Fears emerged that the housing market faces further falls as thousands of buy-to-let property investors are planning to sell up because of new capital gains tax rules coming into force tomorrow. The tax rate falls from as high as 40 per cent to 18 per cent, which could save investors more than £20,000 in tax on any profit. The Bank of England faced growing calls to cut interest rates by up to three quarters of a percentage point.

Ray Boulger, of the mortgage brokers John Charcol, said the move by Skipton was unheard of for standard variable rate loans, which are currently held by around two million home owners. "Things are difficult but this takes things to new levels," Mr Boulger said. "The moves are thinly-disguised profiteering," said Eddy Weatherill, of the Independent Banking Advisory Service. "The main victim will be the consumer, who will pay in terms of the lack of convenience; lack of competitive products and much worse to come. "This is the worst problem I've ever seen in my lifetime. It's worse than [the recession] in the early 1990s because it's coming from almost every direction you can care to imagine." - Telegraph 05/04/2008

Lenders accused of profiteering after rates fall - Britain's biggest lenders were accused of profiteering yesterday for putting up tracker mortgage rates despite two recent interest rate cuts. Banks and Building societies insist they have to raise rates because money has become more expensive to borrow since the credit crunch. But, they have been accused of acting to defend their own profit margins as revenue from riskier customers has dropped away. Eddy Weatherill, of the campaign group Independent Banking Advisory Service, said: "The banks are greedily trying to retain their profit margins. They are all going to do this, because they can get away with it.

The FSA isn't going to do anything, because banks have been through a traumatic time in the last six months. But it's now impacting on customers in a very, very serious way." Mr Weatherill added " Banks have been profiteering right up to the credit crunch, and now customers are faced with picking up the pieces. We have a market sector that's almost allowed to get away with murder, profiteering to a ridiculous extent." A Halifax spokesman denied it was profiteering. He said: "If it costs banks a lot more to buy money in the wholesale markets they have to pass that cost on to the consumers." - Telegraph 17/02/2008

IBAS Comment: The argument used by Halifax is counter productive because Banks do not pass the same margins to those who invest or save with them, despite using those invested funds or savings to lend to borrowers, with the extra margins added for more bank profit.

Judges cancel man's 15 year mortgage debt - Home owners struggling with mortgage payments faced a tougher approach from banks last night after one man's debt was wiped out by senior judges. Businessman Djabar Babai, 62, had not paid NatWest a penny towards arrears on his £250,000 detached home in 15 years. But three Appeal court judges ruled his mortgage debt should be "extinguished" because the banking giant had taken too long to pursue him. Experts also backed the court's ruling. Eddy Weatherill, chief executive of the Independent Banking Advisory Service, said: "It shows that banks are not above the law. It may seem that this gentleman has got away with it, but the rules are that you must act within 12 years." article - Daily Express 13/02/2008 - Full Court of Appeal Judgment

Slump debts probe - Debt collectors are still hounding families who lost their homes in the last housing slump. The Office of Fair Trading has been asked to probe claims that hundreds have been harassed on the doorstep, by phone and with letters and threats of legal action.

The complaint comes from Eddy Weatherill, whose Independent Banking Advisory Service is assisting people who are still being chased for cash. He claims that debt collectors breach rules by harassing victims of repossession from more than 12 years ago, when over 500,000 owners lost homes thanks to crippling rises in interest rates. He said: "We have evidence of pressure on customers to make payments." The complaint comes as latest figures show repossessions have jumped 21 per cent to more than 27,000 last year - the highest figure since 1999. - Mirror 12/02/2008

Banks 'greedy' for putting up mortgage bills despite a cut in interest rates - Banks 'get greedy' as interest rate cut. Banks were branded greedy yesterday for pushing up mortgage bills despite a cut in interest rates. After the Bank of England, headed by governor Mervyn King, lowered borrowing by 0.25 per cent to 5.25 per cent, the banks claimed they were passing on the saving.

Major lenders including Abbey, Nationwide, Woolwich, HSBC and Royal Bank of Scotland all trumpeted 0.25 per cent cuts to their standard mortgage rates, knocking £16 a month off a £100,000 loan. But at the same time, many of them have been quietly increasing the rate they charge for other more competitive deals. Research by Moneyfacts for the Mirror shows that new borrowers are typically paying around £1,500 more for a two-year deal than they were a year ago, when base rates were also 5.25per cent. Financial expert Steven Horrocks said: "The lenders have got the cream and they're desperate to keep it. "There is no way they can justify some of the fees they're charging."

The lenders blame the worldwide credit crunch but many experts believe they are simply fattening up their profit margins. One industry insider said the collapse of Northern Rock was partly to blame. He added: "They don't have to be so razor sharp as there's one less shark in the sea." Eddy Weatherill, of the Independent Banking Advisory Service, said the banks were experts at the "rate squeeze scam". He added: "When the official rate goes up they are quick to pass on the higher cost of borrowing. "But when it goes down they are suddenly not quite so quick on the draw. It is pure greed." – Mirror Business  8/02/2008